Indonesian citizens are increasingly switching to cheap cigarettes, this is the customs response

Jakarta, CNBC Indonesia – The community is starting to see the price of cigarettes as expensive. So many are moving to duty-free cigarettes.

The Directorate General of Customs and Excise, Ministry of Finance, admits that many people migrate to cheap cigarettes, aka down trade. This movement was caused by the tax policy on tobacco products which increased from year to year.

“Down Trading is indeed a factor in tariff policy so far,” said Director General of Customs and Excise, Askolani at the Senayan Parliament Center, Jakarta, announced on Saturday, (17/8/2024).

However, Askolani said that Customs and Excise would monitor this change. He said that it is necessary to ensure that this movement happens naturally, not by tricks of manufacturers to avoid excise duties which are in accordance with regulations.

“We cannot oppose Down Trading if it is purely economic, but it is by doing inappropriate things, with the wrong personalization, the wrong specification that we act against it,” he said. .

In addition to research, Askolani said he will use this depreciation phenomenon to create more appropriate rules in the future. “That will help for future taxes, we will see again to prepare for next year,” he said.

Previously, in a working meeting with the DPR Budget Group regarding the Semester 1 Report, Finance Minister Sri Mulyani announced that tobacco tax revenue was on contract for 2 consecutive years. He said the decline in tax revenue was due to the fact that many cigarette manufacturers had fallen to group 3, where the rates were cheaper.

“Until tax receipts go down,” he said.

However, Sri Mulyani said that this reduction was in line with the goal of establishing a cigarette tax. He said the tax was established to control tobacco consumption.

“For a tax, since we control the production of cigarettes, this is the expected effect,” he said.

(fsd/fsd)